Drug Development Upside Down: Tekmira Getting Paid as BMS Supports Pre-clinical Development

This morning, Tekmira Pharmaceuticals announced a quite unusual type of drug development deal with Bristol-Myers Squibb (BMS). In this expansion of their existing relationship, BMS will have continued access to Tekmira’s industry-leading RNAi delivery technology, SNALP, for target validation. What makes this such an unusual deal, however, is the fact that BMS will share the resulting data with Tekmira which then can turn around and use it to develop its own proprietary RNAi Therapeutics, and on top of that getting paid for it…!

Over the years, the relationship between Tekmira and BMS has taken on a more and more therapeutically flavored character. The partnership initially started out as a type of services relationship whereby Tekmira, then as Protiva, monetized on their liposomal siRNA delivery technology by helping BMS validate drug targets. However, another not insignificant benefit to Tekmira already then was that such services work was highly synergistic with their focus on drug development because such work allowed it to further develop its expertise in SNALP delivery at the partner's expense.

The stickiness of the alliance alone can be considered as evidence that BMS must have been quite pleased with Tekmira's technology. The relationship was first expanded in 2008 to develop SNALP delivery for tissues outside the liver. The following year, BMS then exercised their option to extend the collaboration for another year. This to me was the first indication that BMS might even be interested in RNAi Therapeutics as a drug modality itself and consider SNALP as a promising means to facilitate it. Why otherwise would BMS help develop the basic capabilities of a delivery technology instead of just waiting until Tekmira or any other company could offer a technology ready for such target validation?

On the surface, today’s news could be overlooked as simply extending an already existing relationship in which Tekmira keeps helping BMS validate drug targets. What is very new, however, is that Tekmira can now use gene target-specific data generated during this collaboration, including those by BMS (!), for developing their own RNAi Therapeutics. I have certainly noticed that Tekmira has become a bit cautious about which targets to exercise their 7 picks under Alnylam IP for. For small biotechs that depend on Big Pharma collaborations to fund late-stage trials, the danger of picking a target not desired by Big Pharma is very real. One of the general advantages that Big Pharma has over many of the smaller biotech companies, including Tekmira, is that they can afford to invest in technologies that allows them to pick better targets. This deal thus provides Tekmira with access to the target picking capabilities of a Big Pharma.

One thing that I am curious about is how the deal negotiations evolved. One way to interpret the deal is that BMS is still primarily concerned about target validation and if Tekmira wanted to compete with BMS on some of the targets, so be it...although at the not so inconsiderable expense of instantly granting Tekmira a significant development lead (no need to go through the lengthy small molecule lead discovery and optimization process) and the loss of exclusive target IP. On the other hand, it is possible that BMS approached Tekmira because it was primarily interested in developing RNAi Therapeutics themselves with Tekmira replying ‘yes, but only after you let us pick the best targets as we could use your target picking expertise but also wouldn’t want to help other companies in competing with us for targets that they validate with our own technology.’ Whether this was the case or not, one should not underestimate Tekmira’s ability to say ‘no’ if a technology license would invite too much competition (btw, this is the reason why I would not expect a simple Novartis-Tekmira licensing deal, because Novartis sits higher than Tekmira on the target picking pecking order).

In summary, I believe that this strategic deal was done by a company focused on building a biotech company that can stand on its own feet, giving away almost nothing in return for enhancing their ability to develop their own therapeutics pipeline...and also adding some cash to its coffers, always welcome these days. Having said that, Tekmira’s 7 other SNALP technologies licensees and others in Big Pharma still on the sidelines will have to realize that the longer they wait, the higher the price. To paraphrase the CEO of GSK, quality in small biotech still has its price, despite the economic turmoil.

[Disclosure: DH owns shares in Tekmira Pharmaceuticals]

Bristol-Myers Squibb Deal Further Positions Tekmira as RNAi Therapeutics Delivery Hub

Yesterday, Tekmira added Bristol-Myers Squibb to an already impressive line-up of RNAi Therapeutics delivery partners that further include Alnylam Pharmaceuticals, Roche, Merck, and Takeda. The new research collaboration specifically aims at developing SNALP RNAi for delivery beyond the liver. It follows a previously undisclosed target validation collaboration between BMS and former Protiva (now merged into New Tekmira), and is yet another vote of confidence for the clinical viability of SNALP RNAi delivery.

SNALP RNAi delivery is well validated for gene knockdown in the liver, including in non-human primates. Just this week, Alnylam published in the scientific journal PNAS the lowering of PCSK9, a cardiovascular disease target, in rodent and monkey liver using SNALP liposomes. For clarification purposes since there has been much confusion on the issue of SNALPs and lipidoids, while the particular SNALP formulation used in the publication contained lipidoids, lipidoids are just one of the various other lipids that could be used with SNALP technology. Moreover, Tekmira has non-exclusive access to lipidoids from the MIT via Alnylam in case they wanted to incorporate them into their own SNALPs.

Investing in SNALP delivery outside the liver (Tekmira expects to receive $450k from BMS for the second half of 2008) should therefore expand the therapeutic potential of this technology and directly aid the development of a broad and balanced Tekmira RNAi Therapeutics pipeline. Strategically, it should also provide Tekmira with a potential future development partner and access to disease know-how and gene targets.

Cancer is the most obvious non-liver target given what we know from the passive targeting of SNALP/liposomal particles to solid cancer tissues. Further validation for the concept of using liposomal RNAi delivery for cancer comes from plasmid delivery data from Tekmira itself and various liposomal RNAi publications by others. Some of that research made use of active tumor targeting, and it is not far-fetched that the research collaboration will also consider such active targeting strategies. These may also hold promise for indications outside solid cancer such as hematological malignancies, blood vessel-related disorders (e.g. cardiovascular/metabolic disorders), and immunological diseases.

Cancer and metabolic/cardiovascular disease would also make sense as the two focus areas of BMS research and development. While the scope of the Tekmira-BMS collaboration may indicate that the returns of investing in SNALP delivery to the liver are diminishing with first INDs expected to be filed within the next 12 months, it may also be interpreted as accommodating Alnylam or even point towards a follow-on deal with Alnylam which may not want to further dilute the perceived value of what it has granted its previous platform licensing partners.

Cancer on the other hand is a genetically highly diverse set of diseases, and with SNALP and RNAi, Big Pharma must feel like kids in a candy store with more than enough targets and unmet needs for everybody to pick from. One note of caution though is that while SNALP RNAi has demonstrated potent activity in pre-clinical models of liver cancer, much less is known about its actual knockdown activity in other cancer types. It will therefore be important to confirm the clinical feasibility of SNALP RNAi for cancer through conference presentations and scientific publications.

BMS’ decision, of course, has also to be seen as part of the rush by Big Pharma to transform themselves into developers of innovative biotech drugs. Offers by Roche and BMS itself for Genentech and Imclone, respectively, are just two recent high-profile examples. The deal also demonstrates BMS’ increasing commitment towards the RNAi platform. Only last year, BMS entered into an antisense collaboration with ISIS Pharmaceuticals for PCSK9 knockdown in cardiovascular disease. Interestingly, this was largely based on BMS’ successful validation of PCSK9 as a cardiovascular target using RNAi (and as we now know most likely SNALP-enabled as part of the BMS-Protiva target validation collaboration), data of which was presented at last year’s OTS meeting in Berlin. When asked why BMS decided on antisense, not RNAi in light of the impressive RNAi data presented, the response was that ISIS’ mipomersen represented clinical proof-of-concept that antisense could knock down genes in human liver. It now seems that like other pharmaceutical companies, positive experience with RNAi as a target validation tool has translated into embracing it as a therapeutic platform in its own right.

The one-million-dollar question weighing on the minds of Alnylam investors will be whether yesterday’s development heralds the next Alnylam platform alliance deal. In the past, partners tended to come to Tekmira as Alnylam sub-licensees. Although details of the deal are lacking, due to otherwise too many potential conflicts-of-interests and the importance of Alnylam to Tekmira, it is unlikely that BMS will turn out to be a Merck-like star in the Alnylam-Tekmira constellation. Given that Tekmira has inherited a number of additional technology feasibility partnerships with Big Pharma and biotech from Protiva, further such deals are likely to materialize with Tekmira functioning as one of Alnylam's baits.

An interesting aspect in this context is that the corresponding author of this week’s paper, Kevin Fitzgerald, came to Alnylam (leader of the oncology and cardiovascular/metabolic disease group) from BMS. At BMS, he had been part of the target validation group, very likely the same group that had been involved in the BMS-Protiva collaboration. Obviously, RNAi has not disappointed him, but beyond that, is this part of a larger puzzle?

Now that Tekmira has RNAi delivery partnerships with Alnylam, Roche, Merck, Takeda, and BMS, and more to come, the 100-employee strong Tekmira is slowly emerging as the RNAi Therapeutics delivery hub. This also starts to pay off financially with essentially no appreciable decrease in cash reserves over the last quarter. It will also be interesting whether Tekmira will pursue interests beyond liposomal RNAi delivery. Combining various delivery technologies into one operation, whether as an independent company or not, would have a number of synergies as many of the same questions need to be addressed with the different technologies.